Qualified Lawyers Transfer Scheme (QLTS) Contract Law and Law of Tort Syllabus

What must a claimant establish for duress to the person or economic duress?

(1) Illegitimate pressure (threat of unlawful act, e.g. violence or unlawful economic harm); (2) the pressure was a significant cause inducing the contract; (3) the victim had no practical/reasonable alternative but to submit. Effect: contract is voidable - Universe Tankships v ITWF (The Universe Sentinel).

Distinguish actual undue influence from presumed undue influence.

Actual (Class 1): claimant proves the other party exerted improper pressure. Presumed (Class 2): arises from a relationship of trust and confidence PLUS a transaction calling for explanation; the burden shifts to the defendant to rebut (Royal Bank of Scotland v Etridge 2001). Effect: contract voidable.

What is the effect of illegality on a contract, and what is the modern approach to the illegality defence?

A contract to do an illegal act, or contrary to public policy, is generally void/unenforceable. The modern approach (Patel v Mirza 2016) uses a flexible 'range of factors' / proportionality test: the underlying purpose of the prohibition, other relevant public policies, and whether denial of the claim is proportionate.

What are the three modes of discharge of a contract besides breach?

(1) Performance - complete and precise performance of obligations; (2) Agreement - the parties mutually agree to release each other (requires fresh consideration or accord and satisfaction); (3) Frustration - a supervening event makes performance impossible, illegal or radically different.

State the entire obligations / substantial performance rule on discharge by performance.

Performance must generally be complete and exact (Cutter v Powell). Mitigations: (1) substantial performance allows recovery of the contract price less the cost of defects (Hoenig v Isaacs); (2) acceptance of partial performance; (3) divisible obligations; (4) wrongful prevention by the other party.

Define frustration and give two examples of frustrating events.

Frustration occurs where, after formation, an unforeseen event beyond the parties' control makes performance impossible, illegal, or radically different from what was undertaken (Davis Contractors v Fareham 1956). Examples: destruction of subject matter (Taylor v Caldwell), supervening illegality, or cancellation of an event that was the foundation of the contract (Krell v Henry).

What is the effect of frustration under the Law Reform (Frustrated Contracts) Act 1943?

(1) Money paid before frustration is recoverable and money payable ceases to be payable (s.1(2)); (2) a party who incurred expenses may retain/recover them up to the sums paid/payable, at the court's discretion; (3) a party who received a valuable non-money benefit may have to pay a just sum for it (s.1(3)).

What is anticipatory breach and what options does the innocent party have?

Anticipatory breach occurs where a party indicates, before performance is due, that it will not perform. The innocent party may: (1) accept the repudiation, terminate immediately and sue for damages (Hochster v De La Tour 1853); or (2) affirm the contract, keep it alive and await the performance date.

What is repudiatory breach and what does it entitle the innocent party to do?

A repudiatory breach is a breach of condition, a sufficiently serious breach of an innominate term, or a renunciation of the contract. It entitles the innocent party to elect to terminate (treat the contract as discharged) AND claim damages, or to affirm and claim damages only.

State the compensatory aim of contract damages and the two measures of loss.

Aim: to put the claimant in the position as if the contract had been performed (Robinson v Harman 1848). Measures: (1) expectation/loss of bargain interest, and (2) reliance interest (wasted expenditure). The claimant generally elects one.

State the two limbs of the remoteness rule in Hadley v Baxendale.

Damages are recoverable for loss that: (1) arises naturally, in the usual course of things, from the breach (first limb); or (2) was reasonably in the contemplation of both parties at the time of contracting as the probable result of breach, due to special circumstances communicated (second limb).

What is the claimant's duty to mitigate, and what are its three aspects?

(1) The claimant must take reasonable steps to minimise loss and cannot recover for avoidable loss; (2) the claimant cannot recover for loss actually avoided; (3) the claimant can recover reasonable costs incurred in attempting to mitigate (British Westinghouse v Underground Electric 1912).

When are damages available for non-pecuniary loss (e.g. distress) in contract?

Generally not recoverable, but exceptionally available where: (1) a major or important object of the contract was to provide pleasure, relaxation or peace of mind (Jarvis v Swans Tours; Farley v Skinner), or (2) the distress is directly consequent on physical inconvenience caused by the breach.

Distinguish a liquidated damages clause from a penalty clause under the modern (Cavendish v Makdessi) test.

A liquidated damages clause is a genuine pre-estimate/legitimate protection of interest and is enforceable. A penalty clause is unenforceable. Modern test (Cavendish Square Holding v Makdessi 2015): a clause is penal if it imposes a detriment out of all proportion to any legitimate interest of the innocent party in enforcement.

State the requirements for the equitable remedy of specific performance.

Specific performance compels actual performance. It is discretionary and granted where: damages are inadequate (e.g. sale of land or unique goods); it is not available for personal-service contracts or where it requires constant supervision; the claimant must come with clean hands; and it is subject to laches and hardship.

When will an injunction be granted to enforce a negative covenant in a contract?

A prohibitory injunction may restrain breach of a negative undertaking, even in a personal-service contract, provided it does not indirectly compel performance of the positive obligation or force the defendant to choose between idleness and performance (Warner Bros v Nelson 1937; Lumley v Wagner).

State the common law doctrine of privity of contract.

Only a party to a contract can sue or be sued on it; a third party can neither acquire rights nor have obligations imposed under a contract to which it is not a party (Tweddle v Atkinson 1861; Dunlop v Selfridge 1915).

How does the Contracts (Rights of Third Parties) Act 1999 allow a third party to enforce a term?

A third party may enforce a term if: (1) the contract expressly provides that it may (s.1(1)(a)); or (2) the term purports to confer a benefit on it (s.1(1)(b)), unless on proper construction the parties did not intend it to be enforceable. The third party must be expressly identified by name, class, or description (s.1(3)).

State the three elements required to establish negligence in tort.

(1) A duty of care owed by the defendant to the claimant; (2) breach of that duty (falling below the standard of care); and (3) damage caused by the breach that is not too remote. The claimant must prove all three on the balance of probabilities.

State the Caparo three-stage test for establishing a novel duty of care.

(1) Foreseeability of harm to the claimant; (2) a relationship of proximity between claimant and defendant; and (3) it is fair, just and reasonable to impose a duty - Caparo Industries v Dickman (1990). For established categories the courts proceed incrementally by analogy (Robinson v Chief Constable 2018).

What is the 'neighbour principle' and which case established it?

You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your 'neighbour' - persons so closely and directly affected that you ought reasonably to have them in contemplation. Established in Donoghue v Stevenson (1932) by Lord Atkin.

State the standard of care in negligence and how it is described.

The standard is objective: that of the reasonable person doing the relevant activity ('the man on the Clapham omnibus'). The defendant need not be perfect, only reasonable - Blyth v Birmingham Waterworks (1856): negligence is failing to do what a reasonable person would do, or doing what a prudent person would not.

What is the Bolam test and how was it modified by Bolitho?

Bolam v Friern (1957): a professional is not negligent if they acted in accordance with a practice accepted as proper by a responsible body of opinion in that profession. Bolitho v City & Hackney (1997): the court may reject that opinion if it is not capable of withstanding logical analysis (not logically defensible).

State the 'but for' test for factual causation and the leading case.

The claimant must show that 'but for' the defendant's breach, the harm would not have occurred - Barnett v Chelsea & Kensington Hospital (1969), where the patient would have died of arsenic poisoning regardless of the doctor's negligence, so causation failed.

State the test for remoteness of damage in negligence (legal causation).

Damage is too remote unless it is of a reasonably foreseeable TYPE/kind - The Wagon Mound (No 1) (1961). The precise extent or manner of occurrence need not be foreseeable (Hughes v Lord Advocate), and the defendant takes the victim as found (thin/eggshell skull rule - Smith v Leech Brain).

Distinguish the defences of contributory negligence and volenti non fit injuria.

Contributory negligence (Law Reform (Contributory Negligence) Act 1945): partial defence; damages reduced by a just and equitable proportion reflecting the claimant's share of fault. Volenti: complete defence; the claimant voluntarily and freely accepted the FULL risk of harm with knowledge of it (e.g. ICI v Shatwell).

What duty does an occupier owe to lawful visitors under the Occupiers' Liability Act 1957?

A common duty of care (s.2(2)) to take such care as is reasonable in all the circumstances to see that the visitor is reasonably safe in using the premises for the purposes for which they are permitted to be there. Note: a higher allowance for children (s.2(3)(a)) and an occupier may expect a tradesman to guard against ordinary risks of the trade (s.2(3)(b)).

What duty is owed to trespassers under the Occupiers' Liability Act 1984, and what are its three conditions?

A duty arises if: (1) the occupier is aware of the danger or has reasonable grounds to believe it exists; (2) knows or has reasonable grounds to believe the trespasser is or may come into its vicinity; and (3) the risk is one against which they may reasonably be expected to offer some protection. The duty is to take reasonable care that the trespasser is not injured (covers personal injury, not property).

State the three requirements for vicarious liability.

(1) A tort committed by the wrongdoer; (2) a relationship of employment or one 'akin to employment' between defendant and wrongdoer; and (3) a close/sufficient connection between the tort and the employment such that it is fair and just to hold the employer liable (Lister v Hesley Hall; Mohamud v WM Morrison).

State the four non-delegable personal duties an employer owes to employees.

To provide: (1) competent fellow employees/staff; (2) a safe place of work; (3) safe plant, equipment and materials; and (4) a safe system of work (including supervision) - Wilsons & Clyde Coal v English (1938). These duties are personal and non-delegable.

Distinguish private nuisance from public nuisance.

Private nuisance: an unlawful, substantial and unreasonable interference with a person's use or enjoyment of land (claimant needs an interest in land). Public nuisance: an act/omission materially affecting the reasonable comfort of a class of subjects; actionable as a tort by a claimant who suffers special damage over and above the public.

State the rule in Rylands v Fletcher and its requirements.

A person who, for their own purposes, brings onto land and accumulates something likely to do mischief if it escapes (a non-natural use of land) is strictly liable for the natural consequences of its escape - Rylands v Fletcher (1868). Requirements: (1) accumulation/bringing onto land; (2) a thing likely to do mischief if it escapes; (3) non-natural use; (4) escape; (5) foreseeable damage of the relevant type (Cambridge Water).

State the elements of defamation and the key statutory threshold under the Defamation Act 2013.

A defamatory statement (lowering the claimant in the estimation of right-thinking people), referring to the claimant, and published to a third party. Under s.1 Defamation Act 2013, a statement is not defamatory unless its publication has caused or is likely to cause SERIOUS HARM to reputation (serious financial loss for bodies trading for profit). Defences include truth (s.2), honest opinion (s.3), and publication on a matter of public interest (s.4).

On what basis is liability imposed under the Consumer Protection Act 1987 (product liability), and what must a claimant prove?

Strict liability for damage caused by a defective product. The claimant must prove: (1) the product was defective (its safety is not such as persons generally are entitled to expect, s.3); (2) the defendant is a producer/own-brander/importer; and (3) the defect caused the damage (death, personal injury, or damage to private property exceeding GBP 275). Fault need not be proved. Key defence: the 'development risks'/state-of-the-art defence (s.4(1)(e)).